Tuva Looks To Mongolia for Investment in a Post-Crimea World

There are few places as obscure as the Russian Federation’s Republic of Tuva. Nestled deep in south Siberia along the border with Mongolia, Tuva is the only region of Asian Russia where the indigenous titular nationality makes up the majority of the population. Isolated, impoverished, and underdeveloped, it is one of the least “Russian” places in Russia. Outside of the capital city, Kyzyl, many do not speak Russian, and interethnic hostilities have been an underlying tension in the republic since before the collapse of the Soviet Union.

In the early 2000s, while doing research for a book on Siberian identity and traditional spirituality, British journalist Anna Reid asked a Tuvan minority faction politician, Kadyr-ool Bicheldei, why Tuva was still ruled by Moscow when it had been a nominally independent nation between the two world wars. Bicheldei insisted independence was impossible for a tiny nation of only 300,000 people.

When Reid pressed on about the appeal of pan-Mongol unity (Tuvans speak a Turkic language, but are culturally similar to Mongolians and were once ruled by them), Bicheldei was equally categorical:

“A union with Mongolia to share poverty? Where’s the sense in that?”

But times have changed. A mineral mining boom and close proximity to resource-hungry China have made Mongolia one of the fastest growing economies in the world, with GDP growth peaking at a staggering 17.5% in 2011, then dropping to a still impressive 12.4% in 2012, and 12.5% in 2013.

Mind-boggling economic growth certainly isn’t a cause for celebration for all. Lower-income Mongolians have faced significant inflation, environmentalists are sounding the alarm about the side effects of mining, economists are worried about so-called dutch disease, and cultural changes brought about by rapid development and the increased presence of foreigners in the country have fueled nationalism and xenophobia. Additionally, few believe that these growth rates are sustainable indefinitely, and a dispute between the Mongolian government and the country’s largest investor has dampened investor enthusiasm for Mongolia.

But, though Mongolia’s path may not be smooth, there is clear change and increasing wealth in this traditionally agrarian country.

Even Bicheldei might feel differently about Mongolia today. And he wouldn’t be the only one: In late March, the Russian-language news website Mangezeya reported that the Tuva Republic’s representation office in Ulan-Bator is enticing Mongolian businesspeople into investing in Tuva. Mangezeya reports:

Business circles of the neighboring country [Mongolia] are showing great interest in realizing several investment projects on the territory of Tuva. In particular, the company “UTK Group,” headed by Mr. Onorkhuyang, an ethnic Tuvan and the director of Mongolian-Tuvan Cooperation Society, is working out issues related to the construction of a brick factory with a yearly production capacity of up to 20 million units of brick in the republic [Tuva]. In order to implement the project, the Mongolians incorporated and registered the firm “Universal Technology Company” in Kyzyl.

The company “Monlans” is studying in great detail the possibility of opening a processing plant for hides and furs in the republic using local materials. Mongolian businesspeople are also attracted by plans for the development of granite deposits on the territory of Tuva.

A few additional facts are also relevant: first, Tuva’s representation office was opened approximately a year ago, suggesting that Mongolia’s rapid development attracted Tuva’s attention. Second, according to the Tuvan Republic’s official site, negotiations about the projects were carried out with the participation of the Tuvan government, which has agreed to provide the land for the brick factory and connect the factory to the electrical grid. Finally, in the longer term, the businessmen of the Mongolian-Tuvan Cooperation Society are considering taking part in joint social projects in Tuva.

Obviously, these investment projects are far from high tech by 21st Century standards, and the interest is not just economic, but also cultural, geographic, and potentially political. Still, they represent a fundamental shift in regional fortunes. Once a similarly ragged next-door neighbor, Mongolia is developing at a remarkable rate. Meanwhile, Tuva has remained isolated and impoverished backwater, with a project to connect it to the rest of Russia by rail stalled seemingly indefinitely.

So why is this story important? First, on a more obvious level, it highlights the degree to which development in Russia is uneven, with many regions in Siberia and the Far East lagging far behind cities like Moscow, St. Petersburg, Kazan, Novosibirsk, etc. Second, it emphasizes the way in which economic development is changing the dynamics in Eurasia. If Mongolia can invest in a brick factory and a fur processing plant, what could China do? Much of Siberia and the Far East borders the most economically dynamic region of the world and Siberians can look next door and see the changes happening in China. Ultimately, China is a natural and necessary partner for Russia in developing its massive Asian territory, but one that provokes fear among Russian elites.

Finally, recent events in the post-Soviet sphere have set a dangerous precedent. Russia’s annexation of Crimea struck a clear blow against the post-World War II international order. It also set the Russia-watcher community a-titter with speculation that the Crimean referendum that preceded the annexation could provoke similar demands for referendums on autonomy in Russia’s minority regions. Certainly a small group of ethnic Nanai from Russia’s Khabarovsk region seized on Crimea as an opportunity to call on the authorities to protect their language and culture so they would no longer feel like “wandering gypsies” in their homeland. And a handful of protestors in Buryatia came out in support of Ukraine, with one calling Ukraine “an example and hope for Buryatia to also obtain its freedom and independence.” But true separatism seems unlikely. Regional titular nationalities (Buryats in Buryatia, Altai in the Altai Republic, etc.) seldom make up anywhere near a clear majority of the population in their homelands and many have been heavily Russified.

So the Crimean annexation probably won’t make waves among Russia’s minorities, but it could very well make ripples, causing local indigenous ethnic groups to reevaluate their position in the region and, perhaps, somehow begin to renegotiate relations or advocate for greater language rights and cultural preservation.

In this process, Tuva may be an important place to watch. With its heavily ethnic Tuvan population and regional isolation, it is both culturally and geographically far from much of the rest of Russia—and it may be getting farther. According to Valeria Kan, a Tuvan expert on ethnic conflict, the republic is “actively losing its cultural and ethno-linguistic diversity” as Russians and other non-Tuvan ethnic groups leave in search of better economic possibilities and larger communities of their co-ethnics. Research in 2008 showed that, contrary to the situation in many other minority republics of the Russian Federation, the Russian language was in a “catastrophic condition” in Tuva. The local authorities even had to take measures to buttress the language’s position, including declaring 2014 the “Year of Russian Language” and strengthening the teaching of Russian in rural areas. Despite these efforts, a general trend it visible: Tuva is growing more Tuvan.

Meanwhile, Russia appears to be getting more Russian. Vladimir Putin increasingly positions himself as the defender of conservative values, and the official role of Orthodox Christianity in society is growing. Meanwhile, Russia’s actions in Crimea and Ukraine emphasize the idea of a “greater Russia” made up of ethnic Russians and Russian-speakers abroad. Much interpretation of Putin’s March 18th speech on the annexation of Crimea in the Russian Duma has focused on nationalism, particularly Putin’s usage of the word “russkiy/russkaya,” which emphasizes Russian ethnicity, to describe Crimea and the city of Sevastopol. Taken together, this all suggests a shift toward a much more ethnicity-based conception of Russia.

In such an environment, which may alienate minority ethnic groups, regional investment like Mongolia’s factory projects in Tuva could be very important. If Tuvans come to feel isolated in Russia, Mongolia may look like a much closer and friendlier partner than Moscow. Investment, with its ability to create jobs in a poor region, would only make this partnership more appealing. With time, that could mean a growing number of people with an economic and social orientation toward Mongolia. That wouldn’t necessarily lead to widespread separatism in the near future, and it isn’t necessarily destructive to the Russian state. But it would mean change and a new kind of regionalism in Tuva.

And if Tuvans aren’t the only ones who feel this way—say Tatars increasingly look to Turkey or the Republic of Karelia to Finland—then Russia could be in for some very big changes.

This post was written by...

Matthew Kupfer is a writer focused on Russia, Ukraine, and Central Asia and a graduate student at Harvard University's Davis Center for Russian and Eurasian Studies. A witness to the 2010 interethnic unrest in southern Kyrgyzstan, he is particularly interested in conflicts and interethnic relations in the former Soviet Union. Matthew's research and writing has covered topics as diverse as the interethnic violence in Kyrgyzstan, women's rights in Central Asia, the history of genocide accusations in the former Soviet Union, and the Ukraine Crisis. His work has been published by the Carnegie Endowment for International Peace, the Moscow Times, Radio Free Europe/Radio Liberty, EurasiaNet.org, and Muftah.org. Follow him on Twitter at @Matthew_Kupfer.